Covid-19 Accelerated Mobile Money Acceptance in Ethiopia

In several parts of Africa, receiving and paying for services with a mobile device is a commonplace, mobile money acceptance accelerated in Ethiopia with COVID-19 the catalyst. Ethiopia has lagged in mobile money use, unlike its neighbors Somalia or Kenya in this business.

The Ethiopia government protection policies in the cash-oriented society have stood in the way, with the Ethiopian government starting to promote the technology too.

Early this year, the country announced its intentions to privatize the telecom and reform the financial sector. Seeing the government directs the country’s Central Bank to allow non-financial institutions to offer mobile-money services. That will permit customers to receive, save, credit, any other essential activities online. This move has been meaningful use and a testament to mobile money’s mass adoption for entrepreneurs and consumers in the country, especially Covid-19 related lockdown in the county.

The acceptance of mobile money service amid the COVID-19 crisis seeing restriction of movement, the lockdown of essential business to curb the spread of the virus in the country mobile money was a great use for people in urban areas. According to a local news report, in Jijiga city, business owners say several of its customers are not paying in cash amid fear of a contracting of Covid-19; instead, there use mobile money called HelloCash. The dramatic increase in mobile-money providers and subscribers has made Jijiga a leader among Ethiopian cities. Consequently, as mentioned above, the Ethiopian government reform has seen several mobile money providers with massive stickers promoting mobile-money to incite consumers to pay using their phones.

The government has been backing this initiative by advocating, encouraging the people, and businesses to embrace mobile money assistance in the country. This has seen massive adoption of the service in cafes, small shops, betting companies, and even some transport providers now accept mobile payment. The technology has made transactions safer. And as leapfrog credit card technology, card payments are fading out and are still very expensive, and carrying them out is almost nonexistent in Ethiopia. With mobile money, a phone is used to send and receive payment. According to local reports, mobile money has brought many advantages. The consumer gets their money faster and has made significant numbers of people using mobile money, especially during the related lockdown.

For instance, in Addis Ababa, using a phone to paychecks is not yet commonplace, unlike in Jijiga city. Still, companies such as Amole have found ways to target new users, football fans, and betting enthusiastic pay for tickets via the company’s mobile money facility that partnered with the government-owned Dashen Bank, as made it become a reality. However, it is still challenging to reach a broader population in a country where about 80% of people live in rural areas.

As mentioned earlier, the recent policy shift allowing non-financial institutions to act as mobile money providers has made mobile money more accessible in Ethiopia. In years to come, it is expected to capture half of the people in rural areas, unlike in Kenya’s leader in mobile money in Africa, in which 80% of the population uses the mobile money service. The previous regulation was or less focused on the financial sector. Hence, the new proclamation enables technology service, network providers to have an electronic payment issuer license.

This of course a testament that, the country is riding on a path to glory in mobile money, a force reckoned within Africa in years to come. While given the fact, Ethiopia is the second-most populous country in Africa after Nigeria and having the youth’s population is an incredible asset. Untapped resources for possible growth of mobile money 41 percent is under the age of 15. More than 28 percent is aged 15 to 29.

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